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The Manning Company has financial statements as shown next,which are representative of the company’s historical average. Thefirm is expecting a 30 percent increase in sales next year, andmanagement is concerned about the company’s need for externalfunds. The increase in sales is expected to be carried out withoutany expansion of fixed assets, but rather through more efficientasset utilization in the existing store. Among liabilities, onlycurrent liabilities vary directly with sales.Income StatementSales$270,000Expenses217,400Earnings beforeinterest and taxes$52,600Interest8,800Earnings beforetaxes$43,800Taxes16,800Earnings aftertaxes$27,000Dividends$10,800Balance SheetAssetsLiabilities and Stockholders' EquityCash$6,000Accounts payable$28,400Accountsreceivable54,500Accruedwages2,100Inventory61,000Accruedtaxes4,600Currentassets$121,500Currentliabilities$35,100Fixedassets98,000Notespayable8,800Long-termdebt24,000Commonstock122,000Retainedearnings29,600Totalassets$219,500Totalliabilities and stockholders' equity$219,500Using the percent-of-sales method, determine whether the companyhas external financing needs, or a surplus of funds. (Hint: Aprofit margin and payout ratio must be found from the incomestatement.) (Do not round intermediate calculations.)